Oil prices fall over 7% as US-Iran diplomacy eases Middle East supply fears

Oil prices fell more than 7% on Nov. 2 as diplomatic efforts between Washington and Tehran eased fears of further disruption to Middle Eastern supplies. Hurriyet Daily News reported that Brent crude settled at $104.77 a barrel, while other outlets reported smaller falls and different price levels for the same day.

What we know

• Hurriyet Daily News reported that Brent crude futures for January delivery settled $8.66, or 7.6 percent, lower at $104.77 a barrel, and that U.S. West Texas Intermediate crude for December delivery fell $7.66, or 7.4 percent, to $96.46.
• Hindustan Times reported that Brent fell $4.79, or 4.2%, to $108.64 per barrel by 1020 GMT, Kalinga TV reported a fall of 6.1 per cent to $106.54, and Yahoo Finance reported a fall of around 3% to $110 in early trading.
• Hurriyet Daily News reported that the decline followed reports that U.S. President Donald Trump wanted to give diplomacy more time before deciding whether to resume major strikes on Iran after the Nov. 3 midterm elections, and that Qatar has been mediating between Washington and Tehran.
• Hindustan Times, citing Reuters, reported that Iranian Foreign Minister Abbas Araqchi said on Sunday that talks with Qatari mediators were continuing and making progress.
• Kalinga TV reported that Iranian President Masoud Pezeshkian said Supreme Leader Mojtaba Khamenei had approved the government to some extent to undertake the peace talks.
• Hurriyet Daily News reported that seven OPEC+ producers, including Saudi Arabia and Russia, agreed on Nov. 1 to keep their December production targets unchanged, while Yahoo Finance described the decision as largely symbolic given the war in Iran.

What we don't know yet

• Whether another round of talks will take place: Hindustan Times quoted an official familiar with the talks as saying that another meeting could take place, and that a draft proposal is being circulated.
• Whether Trump will resume strikes on Iran: Hurriyet Daily News said only that he wanted to give diplomacy more time before deciding.
• Whether the diplomacy will last: Hurriyet Daily News reported that Raymond James analyst Pavel Molchanov cautioned that previous efforts had repeatedly raised hopes without producing a lasting resolution, and Kalinga TV reported that investors remain cautious over the uncertain outcome of the negotiations.
• How the Strait of Hormuz dispute will be settled: Hurriyet Daily News reported that Iran has linked reopening the strait to the United States lifting its naval blockade of Iranian ports.

Background

Qatar Standard reported earlier that oil prices slumped 3% in Asian trade on Monday as a draft proposal on a potential end to the US-Iran war was circulated after Iranian negotiators left Qatar. An official briefed on the talks told Reuters that the draft was being circulated for a potential follow-up meeting, and did not say what the proposal contains.